Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Payroll Company Files for Bankruptcy Protection
Author: Joel R. Glucksman
Date: April 5, 2013
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AccuPay, a Bel Air-based payroll company, is seeking bankruptcy protection under Chapter 7 of the Bankruptcy Code as a result of a tax-related investigation.
The company listed 95 creditors in court documents and debts of between $100,001 and $500,000 when it filed for protection in a U.S. Bankruptcy Court in Baltimore. The company said it hopes to liquidate quickly, and estimates it will have enough money to pay creditors.
The company is currently being examined for allegedly failing to forward clients’ tax payments to tax collectors, the Baltimore Sun reports. AccuPay shut down in February following lawsuits brought against it by Bel Air veterinary hospital and Animal Emergency Hospital for “repeatedly and regularly” failing to pay or making only partial payments of federal and state withholding and unemployment taxes over the past five years, according to the paper. Three other clients launched similar lawsuits against the agency. Following the charges, AccuPay came under investigation by the Bel Air Police Department and the Internal Revenue Service.
Many clients, some of whom are creditors, have expressed concerns that they will not receive financial payments from the bankrupt company in a timely manner, which may leave them vulnerable to the IRS.
Gary Burrows, owner of Honor Star Service Inc. an AccuPay client, told the Sun that $23,000 in payments to the payroll company were not sent to the IRS.
“It’s going to be a long, drawn-out thing,” Burrows told the newspaper. “The tax people are going to want to get paid before all this is settled, and being a small company, we just don’t have that money laying around.”
- Practices: Bankruptcy & Creditors' Rights, Corporate Transactions & Business, Bankruptcy Litigation
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